The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of March 31st, a week after the market trough. We are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article we look at how hedge funds traded Halozyme Therapeutics, Inc. (NASDAQ:HALO) and determine whether the smart money was really smart about this stock.
Is Halozyme Therapeutics, Inc. (NASDAQ:HALO) a good investment now? The smart money was getting less optimistic. The number of bullish hedge fund positions fell by 2 lately. Our calculations also showed that HALO isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). HALO was in 23 hedge funds' portfolios at the end of the first quarter of 2020. There were 25 hedge funds in our database with HALO positions at the end of the previous quarter. Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_365194" align="aligncenter" width="392"] David E. Shaw of D.E. Shaw[/caption]
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, on one site we found out that NBA champion Isiah Thomas is now the CEO of this cannabis company. The same site also talks about a snack manufacturer that’s growing at 30% annually. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Hedge fund sentiment towards Tesla reached its all time high at the end of 2019 and Tesla shares more than tripled this year. We are trying to identify other EV revolution winners, so if you have any good ideas send us an email. With all of this in mind we're going to take a peek at the new hedge fund action surrounding Halozyme Therapeutics, Inc. (NASDAQ:HALO).
Hedge fund activity in Halozyme Therapeutics, Inc. (NASDAQ:HALO)
At the end of the first quarter, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -8% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards HALO over the last 18 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, D E Shaw was the largest shareholder of Halozyme Therapeutics, Inc. (NASDAQ:HALO), with a stake worth $34.2 million reported as of the end of September. Trailing D E Shaw was Two Sigma Advisors, which amassed a stake valued at $27.5 million. Fisher Asset Management, Adage Capital Management, and Partner Fund Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Partner Fund Management allocated the biggest weight to Halozyme Therapeutics, Inc. (NASDAQ:HALO), around 0.91% of its 13F portfolio. Portolan Capital Management is also relatively very bullish on the stock, designating 0.83 percent of its 13F equity portfolio to HALO.
Seeing as Halozyme Therapeutics, Inc. (NASDAQ:HALO) has faced bearish sentiment from the smart money, it's safe to say that there lies a certain "tier" of fund managers that decided to sell off their full holdings in the first quarter. Intriguingly, Matt Sirovich and Jeremy Mindich's Scopia Capital dumped the largest position of all the hedgies tracked by Insider Monkey, comprising an estimated $13.1 million in stock. Peter Algert and Kevin Coldiron's fund, Algert Coldiron Investors, also cut its stock, about $1.6 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 2 funds in the first quarter.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Halozyme Therapeutics, Inc. (NASDAQ:HALO) but similarly valued. We will take a look at ChemoCentryx Inc (NASDAQ:CCXI), JetBlue Airways Corporation (NASDAQ:JBLU), Lazard Ltd (NYSE:LAZ), and Valvoline Inc. (NYSE:VVV). All of these stocks' market caps are similar to HALO's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CCXI,30,561624,7 JBLU,36,189627,1 LAZ,15,392048,1 VVV,39,330953,12 Average,30,368563,5.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 30 hedge funds with bullish positions and the average amount invested in these stocks was $369 million. That figure was $154 million in HALO's case. Valvoline Inc. (NYSE:VVV) is the most popular stock in this table. On the other hand Lazard Ltd (NYSE:LAZ) is the least popular one with only 15 bullish hedge fund positions. Halozyme Therapeutics, Inc. (NASDAQ:HALO) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.3% in 2020 through June 30th and still beat the market by 15.5 percentage points. A small number of hedge funds were also right about betting on HALO as the stock returned 49% during the second quarter and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.